Taiwan's DRAM vendors take aim at industry's top tier

HSINCHU, Taiwan (ChipWire/EBN) -- Tired of lagging the rest of the DRAM pack, Taiwan's memory makers hope to catch up to their rivals on the density front by making available limited supplies of 256-megabit chips.

Three local DRAM suppliers -- Mosel-Vitelic, Nanya Technology, and Winbond Electronic -- are in the process of developing their respective 256-Mbit parts, with volume shipments slated for mid-2000 or sooner.

The density advance could put Taiwan in a more competitive position within the worldwide DRAM industry, according to observers, who say that while the island is behind rivals in Europe, Japan, Korea, and the United States, it can no longer be labeled "trailing-edge."

The technology build-up is a conscious one. In the past, Taiwan's DRAM makers mainly geared production toward second-tier memory-module suppliers. But consolidation and attrition within the module industry's bottom ranks has prompted Taiwan's DRAM vendors to move up the technology curve, which is catching the attention of first-tier OEMs scrambling to find supplies in the event of possible shortages next year.

In fact, sources said that several major OEMs, such as Compaq, Dell, Hewlett-Packard, and IBM, are evaluating DRAMs with an eye toward procuring parts from the island's ambitious suppliers in 2000.

"Most [tier-one OEMs] are engaged with a Taiwanese DRAM supplier right now," said Ken Hurley, president of Nanya Technology USA, the U.S. subsidiary of one of Taiwan's largest merchant memory-IC makers.

The additional business the PC industry may steer toward Taiwan's DRAM suppliers is made all the more possible by a recent U.S. International Trade Commission ruling that determined Taiwan's DRAM imports did not materially injure the U.S. memory-chip industry.

The dumping complaint, which had cast a dark cloud over the island's chip makers, carried with it the possibility of import duties. With the decision falling in Taiwan's favor, analysts are beginning to wonder if the island's vendors will fulfill an old promise to become a worldwide power in the DRAM industry. The island now is a minor player, making between 7% and 9% of the world's DRAM chips in 1998, according to IC Insights Inc., Scottsdale, Ariz.

At present, vendors are boosting their production of 16- and 64-Mbit DRAMs, with plans to ramp up 128- and 256-Mbit chips in the next year. It's unclear who is leading the DRAM race in Taiwan, but Hsinchu-based Winbond last month become the first company on the island to announce a 256-Mbit part, with plans to ship the chip in production early next year. Winbond's 256-Mbit DRAM design comes from its technology partner, Toshiba Corp.

Other vendors claim to be close behind with their own devices. "We plan to ramp up our 256-Mbit DRAM production next year," said Rajit Shah, vice president of worldwide sales and marketing for Mosel-Vitelic, also based in Hsinchu. "We expected to make a lot of product announcements in the first quarter of next year."

Mosel-Vitelic will ramp its 256-Mbit DRAM production in early to mid-2000 at ProMos Technologies Inc., a joint venture with Infineon Technologies AG, which at the same time will move its manufacturing process to 0.175-micron line widths.

Other local suppliers are also expected to ship 256-Mbit DRAM next year, including Vanguard International Semiconductor Corp.

Taoyuan-based Nanya, meanwhile, plans to produce its initial 256-Mbit DRAM parts in a new, advanced fab set to open in February, according to Hurley. The company's new plant, Fab 2, is a 0.175- to 0.15-micron facility capable of making 30,000 wafers a month. It will begin making 256-Mbit DRAMs in mid-2000, with volume production slated for the second half of next year, Hurley said.

Nanya's 256-Mbit DRAM design came from IBM Microelectronics as part of a licensing agreement between the two companies.

"We will do some foundry work for IBM, but most of [our 256-Mbit DRAM production] will be under the Nanya name," Hurley said. "We're beginning to see demand [for 256-Mbit DRAMs] in workstations and servers."

Like many DRAM makers, Nanya is hedging its bets and will support a variety of DRAM interfaces. While the 256-Mbit chips will be built using IBM's design, the company is also ramping up a line of 128-Mbit parts built around its own, proprietary technology.